GATT SESSION HAS AGENDA, BUT FINAL OUTCOME IN DOUBT.

Oct 2, 1985

GATT SESSION HAS AGENDA, BUT FINAL OUTCOME IN DOUBT.

GENEVA, SEPTEMBER 30 (IFDA/CHAKRAVARTHI RAGHAVAN)— The special session of the Contracting Parties (CPs) to GATT got underway Monday afternoon, with the adoption of a compromise agenda that left the final outcome in doubt.-

Three Third World countries - Brazil, India and Argentina - entered specific reservations to the agenda, but said they were not blocking its adoption, despite their concerns, as a gesture of cooperation.-

Several other Third World countries said that though they had not made any reservations, their positions on the priorities in GATT or on the issue of new themes was not very different from that of India or Brazil, and that their speeches on the substantive issues would make this clear.-

The special session had been convened at the instance of the U.S., in its efforts to launch a new round of Multilateral Trade Negotiations (MTNs) in GATT, and include within it new themes like trade in services and investment issues related to services, intellectual property rights like patents and trade marks, etc.-

Several Third World countries are opposed to bring "services" and other such issues into GATT, or linking trade in goods with trade in services.-

The preamble, and the articles of GATT only refer to "goods" or "products", and GATT traditionally has only dealt with these and not with "services".-

The U.S. had sought a special session when its efforts to promote a new MTN round, including services and other new themes, was blocked at the july meeting of the GATT Council, when it considered the issue.-

The U.S. request for a special session of GATT, the first to be summoned under a never-before used procedure, was supported by 65 countries, but ran into trouble over its agenda.-

Though the U.S. claimed that the 65 also had supported the agenda and the concept of a new round, several of the 65 have since made clear that their support was only to a special session as a procedural matter, but not to the substance of the issues raised by the U.S. or in the agenda.-

After some informal negotiations, where the U.S. did not yield, the chairman of the GATT Council, Felipe Jaramillo of Colombia had proposed, as the agenda of the session, more or less what the U.S. had wanted.-

The agenda for the special session, proposed by Jaramillo had said its purpose would be "examination of the subject matter and modalities of a proposed new round of multilateral trade negotiations".-

The agenda had been proposed, when the U.S. blocked various compromise efforts.-

As late as september 19, the U.S. delegate, Peter Murphy had said the U.S. was prepared to have the agenda and the final outcome of the meeting adopted by a majority vote.-

Till now all GATT decisions have been adopted by consensus.-

Over the weekend some of the key countries including the European Community, Japan, Switzerland, India, Brazil and Argentina, and the chairman of the CPs, Jaramillo tried to find a compromise that would avoid a vote on the agenda.-

Before the weekend efforts, the U.S. had said it would be agreeable to any such effort only if all the participants committed themselves to a discussion at the special session, which would lead to an ultimate decision on the new round, involving investment, trade in services, intellectual property rights and other issues not so far dealt with in GATT.-

The U.S. had refused to participate in the compromise efforts, when others refused to bow to the U.S. demands.-

The weekend negotiators had arrived at a compromise agenda to meet the U.S. viewpoint, which the U.S., and Canada, had refused to accept, during informal consultations Monday morning.-

On Monday afternoon, just before the CPs session, GATT sources had indicated that because of the U.S. rejection, "everything is up in the air", and the session would perhaps be "suspended" even before an agenda was adopted.-

But after further informal consultations, the chairman of the CPs agreed to propose a revised agenda to meet U.S. viewpoints, which was a further amendment of what had been agreed to over the weekend, but still a climbdown from the original U.S. position.-

The agenda as proposed finally by Jaramillo was: "examination of the subject matter and modalities of a proposed new round of multilateral trade negotiations in the light of the GATT work programme and priorities for the 1980's as contained in the Ministerial declaration of 1982, and the continuing consideration to changes in trading environment so as to ensure that the GATT is responsive to these changes".-

Brazil, India and Argentina, made clear that the agenda as proposed did not meet their viewpoints, and that while, as a gesture of cooperations they would not object to its adoption, they had reservations, and hence would not participate in the consensus either.-

Brazil’s Amb. Paulo Nigeria Batista, referred to the various efforts at reaching a compromise in which Brazil had participated, and regretted that the compromise text arrived at after intense negotiations over the weekend, had been amended at the instance of one delegation (U.S.A.) which had refused to participate in the informal consultations.-

Under the circumstances, Batista said, Brazil would not participate in the consensus adoption of the agenda, but would not block it either.-

India and Argentina made similar statements.-

Third World sources said that during the weekend negotiations, an informal agenda had been agreed to which would have put the implementation of the GATT work programme as the major focus of any new MTN.-

As part of the consultation process, a possible outcome for the three-day meeting of the CPs had also been evolved, "as a basis for discussion and further negotiation".-

Though there had been no commitment on anyone's part, it was the impression that if the agreed agenda had been accepted, there would have been at least an implicit understanding that the informal text on the outcome would have been the basis for further negotiations.-

"But now everything is up in the air, and the Americans may have made a mess of it", one west European source said Monday evening.-

Third World countries like India and Brazil have made a political gesture over the agenda, but unless the U.S. understands their problems and positions, and shows some effort at compromise, GATT is in serious trouble, the source added.-

The informal ad referendum text that had been put forward had envisaged:

-- A meeting of senior officials to carry out an examination of the subject matter and modalities of a new round of negotiations,

-- The continuance of the current arrangements for meetings of GATT CPs, organised and chaired by chairman Jaramillo for "exchange of information based on national studies",

-- The GATT CPs, at their regular session in November 1985, taking a decision on whether a multilateral framework on services was "desirable and appropriate",

-- For the senior officials reporting to another special session of the CPs on November 28, 1985, by when the decision on services from the regular session of the CPs would also be available, and

-- For the November special session of the CPs, taking all these into account, and deciding on the establishment of a Preparatory Committee for the launching of a new round.-

With the adoption of an agenda Monday evening that met with U.S. support, even though it was a considerable change from its own original agenda, but with some major Third World countries disassociating themselves from it, the entire issue of a new round that has brought GATT into a crisis, remains unsolved.-